Cost of living crisis? Life in Australia is better than ever

Outside of my job as a think tank researcher I moonlight in the hospitality industry. In this line of work I have met many foreigners who have moved to Australia for work, life and travel. I often find myself asking them, “why Australia?"

Almost without fail the answer I receive is some variation of “because it is a great place to be”.

The Organisation for Economic Co-operation and Development’s (OECD) ‘Your Better Life Index’, which was released on Tuesday, puts such a statement beyond doubt.

Across the index’s 11 wellbeing indicators, which cover a gamut of areas ranging from housing to income and wealth to work and life, Australia performs exceptionally well.

Take for instance the average household income. Australian households earn an average income of $US27,039 ($25,753), making it the third wealthiest of all twenty-nine countries surveyed. The OECD average was $US22,284 ($21,224).

Furthermore, 75 per cent of Australians said they were satisfied with their life. This is significantly higher than the OECD average, which was 59 per cent. Only three countries, Norway, Canada and Denmark, ranked ahead of us.

The OECD’s report isn’t the first to note Australia’s high quality of life, however. According to the United Nations’ latest Human Development Index, which grades countries based on measures of education, health and income, Australia is the second-most developed country in the world, behind Norway.

Another survey, the Australian Unity Wellbeing Index found that in 2010 Australians rated their personal wellbeing levels highly at 76.2 (out of 100). This was the highest recording since the survey began 10 years ago.

The OECD index points out that Australians do work a lot, however. While the average Australian worker puts in less hours a year than the average OECD worker (1,690 hours compared to 1,739 hours), around 12 per cent of Australians put in 45+ hour weeks. This the fourth-highest percentage of the countries surveyed. Predictably, the Australian Bureau of Statistics has noted that those who work 49+ hours are those who feel their work life balance is most out of whack.

Interestingly though, my research at Per Capita has found that generally work-life balance is not a critical issue in Australia. The ABS notes that around two thirds of Australian workers feel the amount of hours they work each week is close to ideal. Furthermore, job insecurity and worries about employability do not appear to be overwhelming concerns for Australians and the Australian Survey of Social Attitudes notes that the majority of Australians are relatively fulfilled by their work.

The facts add up to this: Australia is seen as a top spot to live and Australians generally enjoy life here. However, based on the rhetoric of Prime Minister Julia Gillard and Opposition Leader Tony Abbott and the headlines in the newspapers, you would be forgiven for thinking this was not the case at all.

In almost every interview transcript for the last six months Tony Abbott has insisted that Australians are facing intensifying ‘cost of living’ pressures (generally in the same breath as ‘carbon tax’) and that these pressures are biting into our quality of life.

The press has also bombarded us with the ‘cost of living’ myth. For instance in the four years between 2002 and 2006 Australia’s major newspapers mentioned ‘cost of living’ in their headlines and lead paragraphs approximately 273 times. Between 2007 and 2011, however, they made 1,003 mentions of cost of living.

In one extraordinary instance The Herald Sun commissioned NATSEM at the University of Canberra to assess whether Australian households are better or worse off than in 2005. When the study found that Australian households are, in fact, $23 dollars a day better off the newspaper simply editorialised against the findings. This smacks of willful misinterpretation of the facts.

The release of studies like ‘Your Better Life Index’, which show that Australia is a great place to live and Australians are satisfied with their lives, proves that those trying to make political hay have blown the ‘cost of living’ debate out of proportion.

Indeed, research that my colleagues and I at Per Capita have been conducting on the cost of living and quality of life in Australia confirms that Australians have it better than most and better than ever.

More of us have jobs, make and save more money, pay down our debts with less difficulty, own bigger houses and better cars and take more trips abroad. Furthermore, the costs of many of the products we regularly buy are decreasing. According to a recent CommSec report our average wages are now buying us more milk, bread, margarine, cheese, steak, chicken and petrol than it did a year ago.

Perhaps, as my colleague Tim Soutphommasane has suggested in a previous report, Australia’s perceived cost of living crisis is a symptom of a broader sense of aspirational angst and cultural anxiety. We fear that our prosperity may someday vanish and we will be left unable to afford the comfortable lifestyles that most of us now enjoy. Such angst has amplified the cost of living issue to such an extent that it now obscures the fact.

Of course, cost of living should not be dismissed out of hand, but it is important to take a step back and appreciate just how good we have it.

Is it any wonder so many other people want the same?

Rupert Denton is a researcher at Per Capita, a progressive think tank.